Classification of Terms

Conditions

Major term of the contract which goes to the root of the contract If breach will result in termination of the contract Innocent party will be able to sue for damages Poussard v Spiers, opera singer missing the opening night of the performance was held to be a breach of condition

Warranties

Minor term of the contract, does not go to the root of the contract A breach of warranty will not result in termination of the contract Innocent party can sue for damages Bettini v Gye, opera singer missing rehearsals was not serious enough to constitute a breach of condition, innocent party could only sue for damages

Innominate Term

An approach used by the courts where classification of a term as a condition or a warranty is impossible Introduced in Hong Kong Fir Shipping v Kawasaki There has been concern that the use of innominate terms has created too much litigation as per Bunge Corporation v Tradax There is evidence to suggest that the use of innominate terms can also create uncertainty, illustrated in The Mihalilis Angelos where the court held ready to load clause must always be conditions for commercial certainty in maritime contracts However, in The Hansa Nord, the courts were able to use this approach prevent the claimant exploiting the defendant, so it will allow judicial flexibility